Monday, September 08, 2008

Where Does Vocationally Relevant Learning Occur?

By Richard Vedder

If one believes that markets work and the marginal productivity theory of wages is valid, as I do, then it can be shown that a very large portion of learning in America happens on the job. As I begin my 44th year of teaching at Ohio University in less than one hour, I believe what I teach is useful from the standpoint of making my students more aware of the civilization in which they live, and I believe I give them knowledge and appreciation of the economic accomplishments of the Industrial Revolution and after. But do I teach anything that increases my students' productivity in the work place? I doubt it.

Walking around the neighborhood yesterday, I encountered one neighbor who flies Airbus jets for American Airlines. Chatting with him, he said he expected he would have to go back to school --a company school-- to learn how to fly the successor airplane, not yet chosen. His continued livelihood depends on private non-college schooling. And most learning actually occurs on the job itself. Compare the earnings of those with an 8th grade education between the ages of 18 and 24 with the earnings of those with the same education aged 55 to 64. The older group typically earns much, much more --picking up skills, experience and maturity with the passage of time. Neither group has much education, but the older group does far, far better economically.

The same patterns hold for more educated Americans. Those with a B.A. degree aged, say, 55 to 59, make buckets more than those aged, say, 25-29 --despite the fact that the younger group moves faster, can do more physically demanding tasks, has better computer skills, etc. There is an awful lot of on-the-job training that goes on in America.

I think this tends to support Charles Murray's point, made earlier by me in Going Broke By Degree, that many Americans simply do not need a college education in order to become productive in the labor force. The degree gets them a good start --and good pay -- because the degree tells employers that the individual is reasonably intelligent and probably fairly disciplined and motivated. But it is not the college education, it is the cognitive skills and the learning through experience that are the most important determinants of worker productivity.

This is a topic we plan to research more in the weeks and months ahead.